This is page numbers 5945 - 5992 of the Hansard for the 18th Assembly, 3rd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was public.

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Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Chair. I move that this committee recommends that in phase two of the review of Northwest Territories' Oil and Gas Legislation, a comprehensive evaluation of options related to significant discovery licences be conducted, providing alternatives for consideration, and table its findings during the 19th Legislative Assembly; and further, that this report identify how the findings will inform any future changes to be made by the Government of the Northwest Territories with respect to its oil and gas resources. Thank you, Mr. Chair.

The Chair

The Chair R.J. Simpson

Thank you, Mr. Vanthuyne. There is an order. To the motion. Mr. O'Reilly.

Kevin O'Reilly

Kevin O'Reilly Frame Lake

Thanks, Mr. Chair. I agree with this recommendation. I am disappointed that the department and the Minister did not actually conduct a comprehensive evaluation of this significant discovery licence issues and problems. There were some options set out in discussion materials that were part of this development of these bills. I don't believe that there was a systematic, inclusive evaluation of the options. Those options include things like even doing away completely with significant discovery licences so that a company would jump from an exploration licence straight to a production licence.

What this has done, and this is an artefact of the way that the federal government set up their legislation, is three significant parts of the Northwest Territories have been tied up forever in terms of oil and gas rights. Even our own Minister issued 10 of these in the post-devolution world that amount to an area of about 39 percent of the area of Prince Edward Island. Our Minister issued those significant discovery licences. It is my view that he actually had a choice about what to do.

The other options include rental rates, as I said, getting rid of SDLs completely. Unfortunately, I don't believe these received adequate consideration in the development of this bill. The purpose of this recommendation is to try to ensure that this issue is addressed in the 19th Assembly and that we try to find ways to deal with the large amounts of land that have been tied up forever. Thanks, Mr. Chair.

The Chair

The Chair R.J. Simpson

Thank you. Mr. McNeely.

Daniel McNeely

Daniel McNeely Sahtu

Thank you, Mr. Chair. To this motion here, I am of the opinion that, if you are going to make an attractive investment environment for players such as the oil and gas community, which have 100 times more the budget that we operate in 12 months, you are going to have to make it regulatorily attractive. Yet, on the hand of balance, ensuring that there is protection for our pristine environment and having experienced many projects within this sector, I am of the opinion that it is not only in our best interest that the developer acknowledges the terms and conditions of the licence issued as well as the daily operations of their land-use permit conditions, as well.

It is in their best interest to run a clean operation in order to maintain shareholder fairness to the increasing dividends that they are in business to produce. This and the other previous motions, I am hesitant to see the rationale behind, in my opinion, I am assuming that are putting barriers to trying to attract development players. Given that balance approach, I am confident that the department has taken this legislation seriously on the road, developing what they heard, as well as committee's chores or committee's efforts in doing their due diligence, as well.

We come to an accommodation here where we see to mitigate what we see as fair to the environment, to the people, and to outside industry. We're seeing benefits from industry as we speak. Having to create barriers in terms of additions, it may sound like it is minimal, but the words of legislation have large impacts on certainty and uncertainty. There is elsewhere for players to invest their proceeds. In today's world, I think there are faster returns elsewhere in more moderate weather conditions. I just want to point that out here. I am not in favour of this motion. Thank you, Mr. Chair.

The Chair

The Chair R.J. Simpson

To the motion. Mr. Testart.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Chair. I think to the economic future of the territory, I always think of what is going to pull our economy forward out of the negative growth that is anticipated for our foreseeable future. The advocacy I have brought to this Chamber has typically revolved around the minerals industry, which I believe is the quickest way to get our economy back on track.

I have had the opportunity to travel to the Sahtu, where oil and gas is not just another economic opportunity, but it very much is the industry that has created a lot of prosperity for the region. Seeing the operations that Imperial Oil has on the ground, seeing the impact it has on the community, really opened up my eyes to how important this industry is to our residents and to our entire territory.

I think oil and gas resources, when done correctly, are an incredibly powerful economic driver. We should be making best efforts to attract that level of investment, but we do have to account for the gaps in infrastructure that make it a much less attractive place than perhaps areas that are closer to tidewater or closer to major infrastructure, which makes this process easier.

Now, when it comes to my understanding in reviewing this bill and having the opportunity to have conversations with departmental officials is that the SDL was developed as a tool to address the lack of infrastructure and allow industry to come into a region that doesn't have adequate support for production but can hold on to it until that support exists. It was really to address the state of play many, many years ago when the federal government was calling the shots. It is an artefact of that regime.

What we have today is a circumstance which my honourable friend from Frame Lake laid out very clearly: a licence that has no expiry, that ties up land and resources potentially forever with no requirement for work. This is a concern that the standing committee heard directly when we met with representatives of the Sahtu Secretariat Incorporated. This was a big issue for them.

It was not driven by committee concerns or by eco-colonialists but rather by Northerners and northern governments who were concerned of a lack of economic opportunity and that SDLs were not supporting their region and their regional economy. I think we can extrapolate that to the global territorial economy, as well. If we had thriving oil fields where they exist in the NWT, I think our economy would be in a much different position than it is today.

When it comes to SDLs, we have to carefully manage this tool. The changes that have been proposed in the legislation, which we will be debating later today, are much needed improvements. The question that is on my mind is: do they go far enough? Do they strike that balance of addressing infrastructure gaps as a tool to say, "Look. We might not have all the infrastructure in place, but you will be able to hold on to your rights until it is there but not in perpetuity. If you are not able to do the work, you move on." I am not sure if we have struck that balance.

There are other options that were presented to the standing committee by the department. The work that this motion is calling for I think has largely been done. It just hasn't been properly assessed by the entire caucus and made a priority of government. It has been the conversation between a Minister and the standing committee.

This motion encourages the government to look at this problem again because I don't think we have struck the balance we need to and really carefully assess how to manage this tool because if it is going to drive investment and industry action in the Northwest Territories, then it has to be done in a way that ensures there is benefit to the people of the Northwest Territories, as well.

Things like a rent scale or mandatory work that has to be done, those are all the kinds of things I would like to see moving forward, and I think this motion calls for that work to be done and to again be carefully considered as a political priority of the next government. I do support the motion. This significant discovery licence is a significant issue, and again it's one that we were unable to satisfactorily address as a standing committee, through the legislative process, so I hope this motion is successfully passed and that the public service who will be supporting the Members of the 19th Assembly take heed of the recommendation and bring forward some options for the next government. Thank you.

The Chair

The Chair R.J. Simpson

Thank you, Mr. Testart. To the motion.

Some Hon. Members

Question.

The Chair

The Chair R.J. Simpson

Question has been called. I am going to ask that all Members raise their hands up high and hold them there until they have been counted when I call for "yea" or "nay." All those in favour? All those opposed? The motion is carried.

---Carried

Thank you, committee. Mr. Vanthuyne.

Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Chair. I move, to the extent it is possible before the dissolution of the 18th Assembly and for the public record, that the government provide a response to these recommendations, even of a preliminary nature, that committee may publicly disclose. Thank you, Mr. Chair.

The Chair

The Chair R.J. Simpson

Thank you. There is a motion on the floor. The motion is in order. To the motion.

Some Hon. Members

Question.

The Chair

The Chair R.J. Simpson

Question has been called. All those in favour? All those opposed? The motion is carried.

---Carried

Thank you, committee. Seeing nothing further, does committee agree that this concludes consideration of Committee Report 25-18(3)?

Some Hon. Members

Agreed.

The Chair

The Chair R.J. Simpson

Thank you, committee. This concludes our consideration of the committee report. We have agreed to next consider Bill 36. We are going to change some personnel out here, so just give us a minute, and we will get right into it.

Thank you, committee. We will get right into Bill 36. I will ask the Minister responsible for it to introduce it. Minister Schumann.

Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair. I am pleased to introduce Bill 36, An Act to Amend the Petroleum Resources Act.

Bill 36 seeks to enhance transparency and public accountability, address administrative and technical issues, and manage significant discoveries of petroleum in the Northwest Territories in the best interests of all residents.

To enhance transparency and public accountability, this bill proposes:

  • requiring greater amounts of information to be disclosed about a number of different licences and activities related to the petroleum in the NWT;
  • increasing public representation on the Environmental Studies Management Board, while requiring more reporting on activities of the fund they manage;
  • adding consideration of Indigenous traditional knowledge and input from Indigenous organizations when appointing board members; and
  • clarifying the requirements related to conflicts of interest on public boards established under the act.

To better manage significant petroleum discoveries, this bill would amend the criteria for an interest holder to be eligible for a significant discovery licence. This bill will also restrict the term of a significant discovery licence to better reflect our territory's values and principles when it comes to land and natural resource management.

On the administrative and technical side, this bill would clarify authorities of the Minister to delegate their powers, duties, and functions to other qualified persons, and correct inconsistencies and errors identified throughout the current Petroleum Resources Act.

This bill is part of the government's work to improve the NWT land and resource management regime, to ensure northerners are able to make decisions that support sustainable, responsible development and protection of the environment while respecting Indigenous rights.

This kind of made-in-the-NWT legislation will help ensure NWT residents are making the decisions about how land and resources in the NWT are developed and used on behalf of current residents and future generations.

This bill resulted from an extensive policy development effort, including significant legislative research; two months of open and multi-platform engagement with the public, industry, Indigenous governments, NGOs, and other interested stakeholders; feedback from those on this committee; and close collaboration with Indigenous governments through the Intergovernmental Council. The Department of Industry, Tourism and Investment also prepared plain-language materials to support the public engagement process.

The Department of Industry, Tourism and Investment has worked with the Legislation Division of the Department of Justice on the Bill. The department does not anticipate that new regulations are necessary for this particular legislative initiative but does anticipate working with the Office of the Regulator of Oil and Gas Operations to ensure appropriate guidance is developed before bringing these changes into force should the bill pass.

I also wish to take this opportunity to commend the committee on their continued engagement with the public as this bill was moved through the legislative process. I welcome any questions the Members may have. Thank you, Mr. Chair.

The Chair

The Chair R.J. Simpson

Thank you, Minister. I will now turn to the chair of the Standing Committee on Economic Development, which considered the bill, for any opening comments that he may have. Mr. Vanthuyne, any opening comments?

Cory Vanthuyne

Cory Vanthuyne Yellowknife North

Thank you, Mr. Chair. Nothing further to add, just similar, along the lines of the opening comments provided with regard to the report, so no further comments. Thank you.

The Chair

The Chair R.J. Simpson

Thank you. Minister, I understand you have witnesses you wish to bring into the Chamber, so, Sergeant-at-Arms, please escort the witnesses into Chamber. We will try to squeeze them all at that table. Minister, you may take your seat at the witness table. Minister, will you please introduce your witnesses for the record.

Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair. On my left, I have Menzie McEachern, director of mineral and petroleum resources. On my immediate right, I have Joel Marion, senior legislation advisor. On my far right, I have Christina Brownlee, lead drafter. Thank you, Mr. Chair.

The Chair

The Chair R.J. Simpson

Thank you. Welcome to the witnesses. I will now open the floor to general comments. Mr. Testart.

Kieron Testart

Kieron Testart Kam Lake

Thank you, Mr. Chair. Just before we get into the actual business of reviewing the legislation clause by clause, I would like to ask some questions on significant discovery licences, and hopefully the witnesses can oblige. How many significant discovery licences, or SDLs, are currently in the Northwest Territories or have been issued to rights holders in the Northwest Territories? Thank you.

The Chair

The Chair R.J. Simpson

Thank you, Mr. Testart. Minister.

Wally Schumann

Wally Schumann Hay River South

Thank you, Mr. Chair. We do not have that number in front of us, but we can probably get it before this session is over so that we can get the number back to the Member. Thank you, Mr. Chair.